Freelancers: cards, wallets, the ERQ and the rules that stay

K-6 lists the roads a freelancer's money can take to reach home, besides the ones you met in Lesson 30.

(1) The Freelancer Card. ADs may issue a dual-currency 'Freelancer Card' to eligible freelancers, to receive export proceeds. Who is eligible, and how the card works, sit in paragraph 4, Part-I of the circular. That is the I-4 card from Lesson 26, with a foreign currency unit and a Taka unit. K-6 does not repeat those details; it simply points back.

(2) MFSPs and PSPs. Mobile Financial Service Providers (MFSPs) and Payment Service Providers (PSPs), working with foreign PSPs, may help bring service export proceeds home. They follow the framework in paragraph 6, Part-I, which you met in Lesson 27 (I-6).

(3) Where the money lands. Funds are credited to the freelancer's digital wallet or bank account, according to the settlement mechanism behind the payment.

(4) Keeping dollars on the wallet road. ADs may keep ERQ accounts in the name of ITES (IT-enabled services) exporters, in coordination with MFSPs and PSPs, up to the permissible retention limit out of the repatriated proceeds. Then the order matters:

1. the AD makes sure the foreign currency is in the ERQ account first, under the standing arrangements;
2. only then does the rest move on to the settlement accounts of the MFSPs and PSPs.

This follows paragraph 6(2)(c), Part-I. Think of a family dinner: the dollar share is served first, then the rest goes to the Taka table. K-6 itself does not set the retention limit; K-7 does.

K-7 answers Enzo's first question: how much may he keep in dollars?

(1) The retention share. Service exporters may keep in foreign currency, in line with Part-O of the circular:

• up to 50% of net export earnings from software, data entry/processing and other ICT-related services;
• up to 30% from other legitimate services.

Notice the words "up to". The freelancer may keep less, or nothing, but not more. In Part-I (Lessons 26 and 27) the circular only spoke of the "eligible" or "permissible" ERQ share; K-7 now gives the figures and points to Part-O for the ERQ rules.

(2) The rest becomes Taka. Whatever is not retained must be converted into Taka and credited to a local currency account. There is no third pocket.

(3) What the ERQ dollars may pay for. Balances in ERQ accounts may be used for bona fide current expenses, such as:

• foreign travel;
• software registration;
• domain and hosting fees;
• server maintenance;
• import of equipment;
• and legitimate personal expenses.

The words "such as" mean the list gives examples. The key test is that the expense is genuine and a current expense.

A quick sum: an app developer earns net USD 1,000. He may keep up to USD 500 in his ERQ account. If he keeps USD 500, the other USD 500 is converted into Taka. The circular does not define "net export earnings" in K-7.

K-8 is short: two duties that sit behind every payment.

(1) Taxes. ADs shall ensure that taxes are deducted and paid, if applicable. Notice who carries the duty: the AD, not the foreign client. K-8 does not give a tax rate or say which taxes apply; it only says "if applicable".

(2) Compliance. All transactions must comply with:

• KYC (Know Your Customer) standards;
• AML/CFT standards; and
• the relevant foreign exchange regulations.

"All" means all. A USD 50 logo fee gets the same basic care as a USD 15,000 app contract. As Dr Omar likes to say, "A rule that only applies to big amounts teaches people to make small amounts." This links back to Lesson 30, where the bank checks that the freelancer is genuine and has the skills for the work.

K-9 answers Enzo's second question: how long can a client make him wait?

The rule: export proceeds from services must be repatriated (brought home) within the prescribed time limits that apply to the export of goods.

So a freelancer gets no extra time just because nothing went through a port. A logo, an app or a data job is treated like a carton of T-shirts when it comes to the deadline for bringing the money home.

K-9 does not repeat the number of days or months. It points to the time limits already set for goods. You met the same idea in Lesson 24 (H-4), which applied the goods repatriation instructions equally to services.

In practice, a freelancer should agree payment terms with a client that fit inside those limits. "Pay whenever you like" is friendly, but it is not a payment term.

K-10 answers Enzo's third question, and his cousin's idea.

The rule: keeping export proceeds abroad, in any form, is a violation of the Foreign Exchange Regulation Act, 1947. The circular names some forms, and the word "including" shows the list is not complete:

• foreign accounts;
• assets;
• virtual assets, such as a digital coin.

The one exception: permitted notional/merchant accounts under approved arrangements. These are the accounts allowed under Part-I, for example with online payment gateways and marketplaces. They are a channel for bringing money home, not a place to store it.

So the cousin's plan to keep the money abroad in a digital coin is not genius. It breaks the law. Lesson 24 (H-5) gave the same warning with more legal detail; K-10 says it in one sentence.

Dr Omar puts it simply: "Earn abroad, bring it home. The dollars a freelancer brings in help pay for the country's imports, just like garment money." K-10 does not set out the penalty itself.

K-11 closes Part K with the bank's paperwork duty.

ADs shall:

1. report all transactions to Bangladesh Bank, with the appropriate purpose codes; and
2. maintain proper records, so the transactions can be reviewed by the regulator.

Why does a little code matter so much? Because it tells the country what the money was for. If a freelancer's app fee is coded as something else, it disappears from the service export figures. Then nobody can see how much the country really earns from its freelancers.

K-11 does not list the codes. In Part-I (Lesson 26), the Freelancer Card receipts were reported under the code for ICT/computer services.

Records matter too. A tidy file today saves a long search when a reviewer asks questions next year.